One year on without Adria Airways
Today marks a year since Slovenia’s former flag carrier Adria Airways filed for bankruptcy. One year on, the global aviation landscape has completely changed due to the devastating impact the coronavirus pandemic has had on the industry, serving a double blow to the Slovenian market, which has been hit by both Adria’s collapse and the health emergency. Following Adria’s bankruptcy, Ljubljana Airport lost considerable connectivity, routes and a steady stream of transfer passengers. Although a number of foreign carriers stepped in, with new arrivals having been planned for this summer as well, capacity, under normal circumstances, still would have been nearly 45% lower than last year.
In June 2019, Adria Airways had a dominant market position in Ljubljana, accounting for 1.509 of the 2.188 aircraft movements at the airport, or 69%. This June, based on planned schedules for the summer prior to the coronavirus outbreak, other airlines would have had 1.325 scheduled movements. This would have been a 90% increase in non-Adria take-offs and landings, but the total would still be down 39%, and seats would have been down 44%. Ljubljana Airport’s figures began to decline in September 2019 and have not improved since, with the coronavirus pandemic having exasperated the downward trend. This year, the airport is expected to record similar figures to those seen between 1991 and 1994.
The Slovenian government has been split on weather a new national carrier should be created with help from a foreign partner. The Slovenian cargo airline Solinair, which is Turkish owned, has submitted its proposal to set up a new commercial airline for the country with help from the government. Croatia Airlines has floated the idea of opening a base in the Slovenian capital, while Ljubljana Airport has been advocating for the state to provide subsidies for foreign airlines in order for them to launch new flights and maintain existing services, rather than create a new national carrier, which it argues would be too expensive. None of these have materialised thus far.
Adria’s bankruptcy procedure, which aims to raise funds in order to cover over 87 million euros in claims being sought from the failed airline, is expected to run until 2024. The bankruptcy administrator has been attempting to sell a number of assets, including its brand name, simulators, flight school, spare parts, apartments, cabin crew uniforms, catering items, pillows, airsickness bags and collectible airplane models, among others. So far, only Adria’s Air Operator’s Certificate (AOC) and flight school have been sold, for 45.000 euros and 7.500 euros respectively. A second attempt to sell the company's brand name failed yesterday with no interest shown. There are indications that Air Adriatic, owned by Slovenian businessman Izet Rastoder, who acquired Adria’s AOC, may attempt to launch a new, leaner Adria with assistance from the state.
The German investment fund 4K Invest, which is ultimately being blamed for Adria’s collapse, has disintegrated since the airline’s bankruptcy. The carrier's last two CEOs, Arno Schuster and Holger Kowarsch, are under investigation on suspicion of committing two criminal offences, as well fraud by abuse of position of power. It is believed the German fund funnelled money from the airline and inked a number of highly damaging consultancy agreements on behalf of the Slovenian carrier with other companies in its ownership. Allegations of abuse of office and business fraud, including the theft of 5.000 US dollars from the company’s safe following its bankruptcy last September, are also being investigated by police. The political responsibility as to who signed off on the sale of Slovenia’s national carrier to an unknown fund and whether proper due diligence was undertaken prior to its sale has never been investigated.
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